BTRTN December 2017 Month in Review: Could This Possibly Be the Calm Before the Real Storm?

Tom with the latest BTRTN month in review, a look back on a consequential month that ended rather quietly by Trumpworld standards.

THE MONTH

Time has a way of compressing in the Trump era.  Consequential events that seem to have occurred ages ago actually happened quite recently, but have been eclipsed by new crises, at times manufactured by Donald Trump.  This is a function of his gargantuan ego, which requires constant headlines about him and only him, and his good old-fashioned PR instincts that dictate that the best way to defuse a mess is simply to invent a new one. 

Thus our “month in review” serves to remind us of those events that received more modest attention than they were due, lost in the flood.  It was at the beginning of December – December 1 in fact -- that Mike Flynn pleaded guilty to one count of lying to the FBI, a seeming rap on the knuckles given the gravity of the full set of potential charges left on the table.  This set off the rampant speculation that for Mueller to have agreed to such a plea, Flynn must have a great deal of dirt indeed on the few who outrank him (Kushner? Pence? Trump?) in Mueller’s presumed prosecutorial hierarchy. 

But the cable-channel-panel-gagglefest had barely begun when, that same day, news leaked that Trump would soon announce that the U.S. would move its embassy from Tel Aviv to Jerusalem.  This is a seismic shift in U.S. policy that set off its own round of speculation on what it might mean, from short-term Mideast violence to the apparent self-immolation of Trump’s Kushner-led peace initiatives in the region, as well as on why Trump might have made such a substantial concession to Netanyahu without demanding something in return.  Was the timing of this bombshell a coincidence?  Likely not. The Jerusalem decision could have been announced any time, and post-Flynn was a particularly ripe moment for Trump’s masterly politics of deflection. 

And so on.  The official announcement (which came on December 6) was quickly overrun by the Alabama Senate special election two days later, a titanic battle that proved, if nothing else, that even deep-red Alabama will vote for a Democrat if given enough reasons.  The Moore defeat, at the hands of Democrat Doug Jones, occurred at the confluence of several of the major stories of 2017 – the political power of an angry and mobilized grass roots Democratic election juggernaut set off by the Trump win in 2016, and the catharsis of the #MeToo movement.  And it foreshadowed election issues Trump and the GOP will face in 2018, the potential rise of Bannon-driven far right wing candidates to challenge mainstream GOP incumbents, and the exposed inability of Trump to translate his personal popularity among his base into a win. 

And yet, the Alabama story was quickly obscured by the big story of the month, the drama that resulted in the GOP success in passing, finally, signature legislation in the form of the new tax law.  Flawed as the law may be (with new pro-business loopholes galore); disproportionate though its benefits may be skewed (hopelessly in favor of the rich); and unpopular as it appears (65% oppose/35% in favor), the passage of the law gives the GOP something to run on in 2018.  And to the bevy of “Trump At One Year” stories now flooding the media, a paragraph now hails or concedes (depending on the slant) a troika of “accomplishments” that Trump followers can revel in:  Gorsuch, deregulation and tax cuts, plus some partial “wins” on Obamacare (killing the mandate) and immigration (Travel Ban 3).  The question of “what has been actually accomplished” has been answered. 

The month also featured a series of mainstream media missteps (a misleading photograph of a Trump rally, a mistimed sequence on a Trump directive and others) and the revelation (by the Department of Justice) of some notably anti-Trump texts by FBI employees, one of whom was an agent assigned to both the Clinton email and Russia meddling investigations.  These gave evidence to fuel the ongoing #FAKENEWS cries, and also to the growing chorus of anti-Mueller sentiment from the strongest of Trump’s GOP supporters in Congress.  The discrediting of the press is old news at this point (Trump long ago labeled the media an “enemy of the state”) but the Mueller attacks are new and growing, and seem to fly in the face of the Trump’s own lawyers’ “accommodate Mueller” strategy that has restrained Trump himself of late on the topic. 

And the GOP managed to avoid what would have been a truly disastrous government shutdown, but only by passing a three-week continuing resolution that punted all the big issues – a major spending bill, CHIP (child insurance), DACA (dreamers) and the Obamacare supports that are owed to Susan Collins in return for her support of the tax cut and the elimination of the mandate. 

Obamacare has proved resilient in that face of the chip-chipping of it that has occupied the GOP since its own spectacular failure to “repeal and replace” it.  Trump may claim the death knell of Obamacare, but tell that to the nearly 9 million who enrolled in it – almost equal to last year’s total despite a de minimis marketing campaign allowed by Trump, a shortened sign-up window and the relentless assault on its provisions. 

We might have mentioned that this month Trump announced his “America First” Security Strategy, but for the fact that these documents are rarely implemented or viewed, in retrospect, as influential in any way.  (Then Secretary of Defense Don Rumsfeld never read the one issued in 2002, much less had input into it.)  This year’s document is dry as toast, but at least it was written soberly in assessing these difficult times.  However, Trump’s speech that accompanied it, which purported to give voice to its pages, more resembled the type of speech he used to rile up Roy Moore supporters, using language (in referring to “failures in the past” with respect to North Korea, Iraq and ISIS) that is nowhere to be found in the document.  What you will find in the document, but not in Trump’s speech, was a clear-eyed assessment of Russia’s status as an enemy aggressively seeking to undermine U.S. interests.  In his speech Trump mentioned Russia only once, referring to it meekly as a “rival power.” 

All in all, though, one would have to call this an “up” month for Trump, with his legislative “triumph,” the media and FBI gaffes, and the relative quiet of last ten days of the year (silence is always good for Trump).  

He’ll need it, because 2018 will get off to a booming start with the budget, DACA, CHIP, Obamacare and all the impending congressional battles.  Beyond that, the GOP is displaying typical disunity, as Mitch McConnell gamely talks of bi-partisan legislation (e.g., infrastructure, immigration) while Paul Ryan yearns to take on the powder keg of cutting entitlement programs.  North Korea may be on the brink of more nuclear testing, and the 2018 midterm campaigns will be underway soon.  The Mueller investigation marches on.  Trump mulls a trade war with China, and Russia seeks to influence the midterms while Trump looks the other way.  Might we look back on December and view it as the calm before the storm?  Or, more ominously, might we look back on all of 2017 that way? 

Take a deep breath, it’s all about to start up again.

THE NUMBERS

Trump’s approval rating remained at 39%, the same range it has been in since July.  His rating has only increased in one month – September – when it bounced up to 40% after dipping to 39% in August.

TRUMP APPROVAL RATING
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Approve	48	47	44	44	42	41	40	39	40	40	39	39
Disapprove	46	50	51	52	53	55	56	57	56	56	56	56
Net	2	-3	-7	-8	-11	-14	-16	-19	-15	-17	-17	-17

THE TRUMP-O-METER

The “Trumpometer” dropped modestly from +20 to +18 in the last month.  The stock market rose yet again, and is now a full 25% higher than at the time of the Trump Inaugural.  The GDP 3Q latest adjustment was slightly downward, however, and Consumer Confidence waned more markedly (from 130 to 122), and those declines moved the overall index downward. 

(Note:  the Trumpometer was designed to answer the question of whether the country is better off, economically, than it was when Trump took office.  It is a single measure that measures how five key economic indicators -- the unemployment rate, the Dow-Jones Industrial Average, the Consumer Confidence Index, the price of gasoline, and the GDP – have changed since Inauguration Day.  The +18 means that these measures are, on average, 18% better than they were when Trump took over the presidency, as demonstrated in the chart below.)

TRUMPOMETER	End Clinton  1/20/2001	End Bush 1/20/2009	End Obama 1/20/2017 (Base = 0)	Trump 11/30/2017	Trump 12/31/2017	% Chg. Vs. Inaug. (+ = Better)
	+25	-53	0	20	18	18%
Unemployment Rate	4.2	7.8	4.7	4.1	4.1	13%
Consumer Confidence	129	38	114	130	122	7%
Price of Gas	1.27	1.84	2.44	2.65	2.59	-6%
Dow Jones	10,588	8,281	19,732	24,272	24,719	25%
GDP	4.5	-6.2	2.1	3.3	3.2	52%

As we have said before, it would be astonishing for the stock market, widely viewed as overvalued even as it races ahead, to not experience some significant pullback at some point.  It is currently value at 18 times forward looking 12-month earnings, which is above the historical norm of 16 times (which would be roughly 3,000 points lower on the Dow).